The signs are emerging…Clear Channel cuts back on commercials. Regent’s Terry Jacobs says: “It’s not just about fewer commercials. It’s about improving the product.” Etc. After nearly a decade of focusing on acquisitions, increasing commercial loads and cost-cutting, radio is finally waking up to the reality that its PRODUCT matters!
Unfortunately, radio trashed its on-air product (or, at best, ignored it) during the period when new alternatives to AM and FM emerged: Napster, then Kazaa, then iTunes, Sirius and XM would challenge our industry regardless of how good radio was! But radio’s “decade of decline” provided even more fertile ground for these upstarts.
Turning it around will not be easy. Changing perceptions never is! Consider General Motors…It has lost half of its market share since the ’80s, when its product bottomed out with mundane design and shoddy quality. Since then, G.M. has spent billions launching new products. Its quality is now competitive with the Japanese makers. It gives more away in rebates than any of its competitors. And it’s share continues to decline!
Many consumers tried the alternatives to G.M. (especially, Honda and Toyota), liked them, and won’t be going back. Will history repeat with the alternatives to AM and FM???
Half-hearted measures won’t get it done. Playing the right music and a lot of it is essential. But radio can never deliver more music than satellite radio. And it can never play music more appealing a listener’s own iPod!
It is what happens between songs — entertainment, involvement, stationality, spontaneity — where radio has the potential edge on its alternatives.
Radio isn’t going away. But it could be headed for a less profitable future if it doesn’t refocus on PRODUCT in a major way.